Carbonated fruit-flavoured beverage classification turns on HSN notes, placing the drink in the aerated beverage sub-heading.

Carbonated fruit-flavoured beverages are classifiable under Heading 2202 by applying the HSN Explanatory Notes, which treat aerated drinks flavoured with fruit juice, essences or compound extracts as covered by Sub-heading 2202 10. A drink containing carbonated water, sugar, orange juice concentrate, flavours, additives and preservatives was therefore not treated as a fruit-juice-based drink under Tariff Item 2202 99 20, and the residuary Tariff Item 2202 99 90 was unnecessary once the specific sub-heading applied. The product was accordingly classified as an aerated flavoured beverage under Sub-heading 2202 10, attracting GST at 28% and compensation cess at 12%.

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Issues: Classification of "Fanta Fruity Orange" under Tariff Heading 2202, namely whether it falls under Sub-heading 2202 10, Tariff Item 2202 99 20, or the residuary Tariff Item 2202 99 90, and the consequent GST and compensation cess rate.

Analysis: The product contained carbonated water, sugar, orange juice concentrate, sweeteners, orange flavours, additives, preservatives and colour, and was presented in PET bottles. The Harmonised System Explanatory Notes to Heading 2202 specifically cover aerated beverages such as orangeade flavoured with fruit juices, essences or compound extracts, and the authority treated these notes as a dependable guide for interpreting Heading 2202 of the Customs Tariff Act, 1975. The presence of carbon dioxide as a preservative did not exclude the product from Sub-heading 2202 10. The contention that the product was a fruit juice based drink under Tariff Item 2202 99 20 was rejected because drinks based on fruit juice concentrate were treated as distinct from fruit pulp or fruit juice based drinks, and the residuary entry under Tariff Item 2202 99 90 was held to be unnecessary once the product fit Sub-heading 2202 10.

Conclusion: The product was held classifiable under Sub-heading 2202 10, with GST at 28% and compensation cess at 12% applicable.

Final Conclusion: The advance ruling was modified to classify the product as an aerated flavoured beverage under Sub-heading 2202 10, resulting in the higher GST and compensation cess rate rather than the lower rate claimed by the appellant.

Ratio Decidendi: For classification under Heading 2202, the HSN Explanatory Notes govern, and a carbonated beverage flavoured with fruit juice concentrate and presented as an aerated fruit beverage falls within Sub-heading 2202 10 rather than the fruit-juice-based or residuary entries.

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